macro Archives - MULTI-ACT

Are you wondering why you should invest in emerging markets? Here’s something to consider. For long-term investors, a unique opportunity presents itself in emerging market equities because of the rare combination of cheap equity valuations, depressed currencies, and positive momentum in equity prices and economic fundamentals.

Discover how a building-block approach to valuation creates forward-looking returns rather than the idea that it’s too late to invest, and how depressed currencies show a projected real return of 3.9% a year over the next decade. In addition to this, EM stocks are trading cheaply and showing robust 12-month price momentum.

The classical British economist David Ricardo’s advice to investors to “cut short losses” and “let your profits run on” couldn’t be more relevant. While the Trump election was forecast to leave a trail of destruction, this article delves deeper into why it is better to invest in attractively valued emerging market assets even in the midst of fear and uncertainty, which are making a slow exit.

This issue of the journal from Edelweiss Holdings has two brief essays on relevant issues that hold value for any investor today.

Reflections on Trump’s America unveils historic perspective on the patriotic and business-wise President-elect Donald Trump. Within the context of financial markets, his election has received jubilation worthy of the second coming of an industrial revolution. Yet, even as Mr. Trump’s businesslike ideas should be welcomed in a nation that has veered further and further into an economic unknown, this essay shows how there is little reason for the boundless euphoria of anticipated greatness.

The Challenge of Preserving Capital within the Financial System by James Watson is an essay that makes for compelling read. While touching on myths attached to liquidity and the troubling imposition of control on individual financial affairs, this essay makes a point that has been echoed by Multi-Act; when credit implodes – as it must – only HQ stocks will have any sort of bid, as market participants realize that the inherent strength of HQ stocks were obscured with the hype attached to liquidity and credit mis-pricing.

Ray Dalio, founder, Bridgewater Associates, is a vocal opponent of quantitative easing by central banks. In his speech at the Federal Reserve Bank of New York on October 5 this year, he presented what may seem to be a rather gloomy picture akin to a depression warning.

Learn about long- and short-term debt cycle and read what one of world’s most influential investors has to say about the limits to central banks’ monetary policies.

Why is it that after ninety-something months of zero or near-zero rates, growth is still sputtering? Why is the corporate sector in an earnings recession? Why is the productivity growth negative? And why do central bankers still insist that no recession is in the forecast?
Read this article to dismiss the myth if in reality the central bankers can control the cycles and public behavior and can act as last anchor of confidence to eternity. Read More